Access PPP Funding with FundThrough

By Garrett Baldwin

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In December 2020, Congress authorized the second round of the PPP Funding. The $284.5 billion Paycheck Protection Program will provide forgivable loans to small businesses in need of loans in the wake of COVID-19. This program helps companies keep employees on their payroll.

Starting on January 11, first-time PPP funding applicants could begin the loan process. On January 13, second-time applicants will be eligible for PPP funding. Finally, additional funding is available to businesses that returned their first PPP loan or did not receive the full amount under their original qualification.

Businesses, self-employed workers, and independent contractors are qualified and encouraged to apply for funding. Also, Canadian companies with U.S. subsidiaries may be eligible. This post provides information about the funding process and our efforts to help small businesses access loans.

Rules for First Time PPP Funding Applicants

PPP loans are available to small businesses that will utilize at least 60% of their funding to meet payroll. Small businesses can allocate the rest of their funding to fixed costs, including rent and utilities.

The definition of “payroll” is the same as the original CARES Act with one new addition. “Payroll” includes:

Salary, wages, commissions, or similar compensation,
Payment of cash tips or cash equivalent
Payment for vacation, parental, family, medical, or sick leave;
Payment required for the provisions of employee benefits such as insurance premiums;
Payment of any retirement benefit by an employer;
Allowance for dismissal or separation;
Payment of State or local tax assessed on the compensation of employees; and, finally, a new addition:
Group benefits like group life, disability, vision, or dental insurance.

Payroll does not include any compensation for an employee who earns more than $100,000 each year. It does not include employees who live outside of the United States or for qualified sick and family leave wages under which credits are permitted within sections 7001 and 7003 of the Families First Coronavirus Response Act.

Rules for Second Time Applicants of PPP Loans

Second-time (second draw) applicants do need to meet specific criteria to obtain another round of funding. Applicants should:

Employ 300 people or fewer;
Have used or will use the full amount of their first PPP loan; and,
Demonstrate a minimum 25% reduction in “gross receipts” during any quarter in 2020 compared with the same quarter in 2019.

Applicants may apply for up to 2.5 times their average payroll, up to $2 million.

Meanwhile, there exists a provision for “Hard Hit Businesses” that operate in the Accommodations (hotels) and Food Services (restaurants) industries. These companies may obtain a second draw loan worth upwards of 3.5 times their average monthly payroll costs.

Companies seeking information on the forgiveness of their first-round PPP loan can obtain the proper forms right here.